Housing Market Recovery Continues in March

MADISON, WI – Existing home sales were up significantly in March, with home sales growing 25 percent over the levels of March 2011, according to the latest monthly report by the Wisconsin REALTORS® Association (WRA). Home prices in March also rose slightly for the first time since the end of 2010, up 0.4 percent to $123,500 compared to the same month last year.

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“We certainly had a mild winter, and that may account for some of the strength in home sales last month, but it’s important to note that we’ve seen very strong growth in home sales over the last nine months,” said Rob Keefe, Chairman of the WRA board of directors. He pointed out that all regions of the state were up in March, and most saw growth in the range of 24 percent to 33 percent. The Northeast and the Central regions grew at approximately 32 percent over the period, whereas three other regions — North, South Central and Southeast — were up between 24.3 percent and 27.9 percent over the period. Finally, the West region was up eight percent in March 2012 relative to March 2011. “These are the strongest signals we have seen in some time going into the spring selling season,” said Keefe, who noted that the combination of low rates and modest improvements in the job market should support continued growth in sales.

The WRA says an improving state jobs market is helping home sales. Since December, the state has added nearly 18,000 nonfarm private jobs even as government employment fell by 3,400 based on seasonally adjusted estimates. “It’s encouraging to see job growth in the state, especially in relatively high-paying sectors,” said Michael Theo, WRA President and CEO, who noted that the manufacturing sector added 4,300 jobs, and construction sector employment was up 6,500 workers over the period. “It’s also good to see some slight improvement in home prices as inventories continue to be sold,” said Theo. After peaking at just under 72,000 unsold homes in July 2011, the state has averaged 52,758 unsold homes over the first three months of this year. “Putting a dent in the stock of unsold homes is key to home price appreciation, and we saw median prices grow in four of the six regions statewide,” said Theo. The strongest appreciation in median prices was in the North region where median prices rose 10.5 percent in March compared to March 2011. Theo cautioned that some of this change in the median price may be due to a change in the mix of homes sold, for example from lower-cost vacation properties to more high-end properties. Also strong was the Central region where median prices rose 6.7 percent over the period. The Northeast and West regions were also up in March in the range of 3.5 to 3.7 percent, and the Southeast and South Central parts of the state had slight reductions in median prices, down 3.1 percent and 2.3 percent, respectively.

The Wisconsin Housing Affordability Index, which measures the percentage of a median-priced home that a buyer with the median family income can afford, was at 260 for March. This is down from a revised 280 in February. While housing remains very affordable in the state, there are clear indications that the market has been strengthening. “With low housing prices and historically low interest rates, this is an excellent time for those who have been considering a house to make the jump to ownership,” said Theo. He noted that using an experienced REALTOR® can help new buyers identify exceptional opportunities in whatever market they are considering.